If you were organizing dinner parties for the world, you would need to put out 219,000 more place settings every night than you had the night before.1 That is how fast the Earth’s population is growing. But global agricultural production is currently failing to keep pace. A June 2012 report by the UN Food and Agriculture Organization (FAO) sees trouble looming ahead, warning that “land and water resources are now much more stressed than in the past and are becoming scarcer.”2

Many global analysts predict that the biggest security threats in the twenty-first century may center on disputes over water and the food that Earth’s dwindling water supply is able to produce. The greatest threat to our common future, writes Lester Brown, President of the Earth Policy Institute, “is no longer conflict between heavily armed superpowers, but rather spreading food shortages and rising food prices—and the political turmoil this would lead to.”3

Hunger, of course, has been a perennial cause of political instability. Food riots were a contributing cause of the French Revolution and countless other upheavals throughout history. More recently, the increasing globalization of the world’s volatile food market has led to new threats to the global poor. Inflation in the price of wheat, rice, and soy during the world food crisis of 2007–2008 doubled the cost of these staples, in some cases virtually overnight. This was due only in part to actual food shortages. A lot of the “agriflation” was driven by commodity speculators—investors in hedge funds, pension funds, and other financial institutions betting on future food prices.4

Michael Greenberger in the George Washington Law Review calls this kind of speculation “gambling,” and argues that it distorts commodity prices by decoupling them from real-world market forces like supply and demand.5

Commodity speculation in food staples has created huge profits for companies such as the American investment firm Goldman Sachs, which is regarded as one of the world’s leaders in the trading of crop futures. Many other international banks are also heavily involved. The United Kingdom–based public interest group World Development Movement (WDM) estimates that Barclays for example, has made up to £340 million a year from speculating on food prices.6 In February, bowing to public pressure, Barclays followed the lead of several German, Austrian, and Scandinavian banks in severely reducing its involvement in the food futures market.

Yet, despite these voluntary withdrawals by a few big players, the food futures market continues to expand. In a 2010 report, “The Great Hunger Lottery,” the WDM found that financial speculation on food had nearly doubled in the preceding five years, from $65 billion a year to $126 billion a year worldwide.7 This spike in investment has resulted in a highly volatile market where prices for farmers and consumers alike are no longer dependable. Since 2007, global food prices have surged twice—in both cases leading to rises of more than 50 percent in the cost of wheat, to name one commodity, in less than a year.8

Another factor that is contributing to local food shortages in some areas is the shift from growing food crops to the production of biofuel—mostly for export—in regions of Africa, Asia, and Latin America. Oil palms, jatropha, and sugar cane are being grown in the Philippines, Indonesia, Guinea, and elsewhere to feed Europe’s (and to a lesser extent the United States’) appetite for a cheap and sustainable replacement for gasoline. But in places like Sumatra—where Asia’s last great rainforest is being razed to make way for massive oil palm plantations—the current biofuels boom is anything but sustainable. Nor is it sustainable for the Guarani of Brazil, who are fighting a losing battle to maintain their tribal lands against the U.S. food giant Bunge, which is buying great tracts to produce ethanol from sugar cane.9

Biofuels production has been a cash cow for many developing countries. But its effect on the poor has been more problematic. In a report published in the Journal of American Physicians and Surgeons, Dr. Indur Goklany estimates that the increase in biofuels production may be responsible for as many as 200,000 deaths per year from hunger and hunger-related illnesses. He argues that this massive shift in land use has decreased the amount of food available for human consumption, and consequently raised the prices of vital staples. There are now millions who can no longer afford to buy these staples in sufficient quantities.10

The debate over the ethics of biofuel production underscores the fact that decisions made in wealthy countries often have unintended consequences in the global South. In a world of limited and in many cases diminishing natural resources, how do we ensure that these resources are equitably distributed? Nowhere is this question more urgent than when it comes to food. Many international bodies and philanthropic organizations have recognized the critical need to help poor countries enhance their food security, but there is considerable debate over how to achieve these goals. When large international agencies talk about eliminating hunger in the developing world, the discussion usually turns to boosting production through the spread of industrial agriculture, with its efficiencies of scale and high-yield genetically modified seeds. This has been the thinking of the Bill and Melinda Gates Foundation and the Rockefeller Foundation, which have joined forces to create the Alliance for a Green Revolution in Africa (AGRA), which has largely taken a technology-based approach.11 Some food activists, however, counter that increasing agricultural efficiency is less important than supporting sustainable local agriculture and indigenous food markets. The crucial questions, they say, are what kinds of crops are being grown, who is growing them, and for whom are they being produced. The rapid expansion of biofuels plantations and cattle ranching in the global South has been a boon for agribusinesses and their wealthy customers in the developed world. But it has also siphoned valuable land and water resources away from producing food for the people who need it the most.

Ironically, three quarters of the world’s hungry live in farming areas. Many are former small farmers who have been pushed off their land by a variety of economic forces. According to Olivier de Schutter, the UN Special Rapporteur on the Right to Food, “small-scale family agriculture, on which most of the world’s rural poor still depend, is threatened by large-scale plantations, export-led agriculture, and the production not of food but commodities.”12 The consequences of this process have been profound, and have threatened millions with starvation. Some development experts have argued that the spread of large-scale industrial agriculture in Africa and across the global South will ultimately lower food costs and benefit the poor. But recent price increases call this view into question. When local food prices become locked into highly unstable global commodity prices, it is often the people at the bottom of the economic ladder who are the first to feel the pain. The poor, many of whom already spend upwards of half their income on food, can ill afford to pay more for staple goods.

There is a debate about whether the number of hungry people has actually increased over the past decade or essentially remained stable as a percentage of the global population. (The FAO puts the current figure at 870 million—more than the combined population of the United States, Europe, and Canada.)13 Nobody disputes that the recent downturn in the world economy and the rise in food prices have hit the poor hard. The slowdown in progress in lifting people out of hunger over the past five years should “sound alarm bells around the globe,” says the activist group Oxfam.14 This slowdown effectively reverses the trend initiated by the so-called Green Revolution, which introduced to the developing world high-yield grain varieties and such industrial farming techniques as mechanical irrigation, synthetic fertilizers, pesticides, and herbicides. During the second half of the twentieth century agricultural yields grew, and hunger diminished in many parts of the globe. But much has changed over the intervening years, and today some agricultural scientists fear that we are entering a period of growing food insecurity during which demand for food will outstrip supply. One fear is that rapid population growth will outpace the projected increases in production. Another is the earlier-than-predicted impact of climate change, which is blamed for an increase in extreme weather events, such as flooding, drought, record heat waves, and the spread of destructive insect infestation into new areas.15 In the summer of 2012, drought in the bread baskets of the United States, Ukraine, and Russia, and crop-wilting heat waves in Europe, Australia, and other regions cut world wheat production significantly. In the U.S. Midwest a heat wave combined with the worst drought in over a quarter-century to depress grain production to its lowest levels in decades, raising food prices steeply for American consumers.16

Ironically, some biologists believed that the glut of carbon dioxide emissions would have a stimulating effect on plant growth, as well as increase the length of the growing season in temperate areas, thus boosting crop yields. The consensus among most scientists was that global climate change would disrupt rainfall patterns and dry out many agriculturally productive areas, especially in the global South—but not until the latter part of the twenty-first century.17 These assessments, however, are now widely acknowledged to have been overly optimistic. The growing instability in the climate system has already dramatically cut crop yields in many areas. According to Lester Brown, “for every 1 degree Celsius rise in temperature above the optimum during the growing season, we can expect a 10 percent decline in grain yields.”18

These declines have far-reaching political consequences. Not coincidentally, the Arab Spring occurred at a time when grain prices were soaring. With the disappointing wheat harvest in the summer of 2012, the price of wheat rose to nine dollars a bushel on the global market—an all-time-high—leading some to predict renewed trouble in the region in the coming months and years.19 Domestic wheat production in Saudi Arabia, Syria, and Iraq has been in a free fall in recent years, as aquifers in these desert regions are becoming exhausted, making such countries increasingly dependent on expensive imports to feed their populations. Bread riots in 2010 and 2011 in the Middle East may have been a harbinger of worse unrest to come.

TURNING TO AFRICA FOR FOOD SECURITY

To prevent the trouble that many see looming on the horizon, several countries are buying up vast tracts in other states to feed their own burgeoning populations. Both India and China—which face the prospect of severe water shortages in the years ahead—are purchasing prime agricultural land in already food-stressed areas in Africa to ensure their own future food security. Saudi Arabia, South Korea, Egypt, and Japan, as well as multinational agribusinesses and investment banks, are also scrambling to increase their foreign land holdings. The Telegraph reports that the World Bank funded over $8 billion dollars of these land deals over the past decade.20

Food companies in the North have always purchased land in the global South to produce export crops. What is different today is the unprecedented scale of these purchases and the kinds of crops that are being grown. In the past, land was acquired to grow specialty tropical products, such as cocoa, coffee, spices, bananas, oranges, and other exotic fruits. Now, agricultural land is increasingly sought for growing basic staples, such as rice, wheat, and soy, which many countries fear they will soon be unable to produce enough of. No one is sure exactly how extensive the ongoing land transfers have been. The small nonprofit group GRAIN, which has been attempting to track these deals, estimates that on average some 10 million hectares of land have been purchased by foreign companies every year since 2007, but this figure may actually be a conservative one, since a lot of these transactions have been completed with deliberate secrecy.21

Transferring agricultural capacity from desperately poor countries to wealthier ones is an activity that few states, understandably, are prepared to boast about.22 These deals are being negotiated across the globe—from Colombia to Cambodia, from New Guinea to Brazil—as well as in many states of the former Soviet Union. But the largest of these purchases are occurring in Africa, which has the greatest percentage of unused arable land, as well as bargain-basement prices. African countries also frequently have lax land tenure laws. The agreements negotiated between African countries and agribusinesses are reportedly often skewed in the latter’s favor. According to Jun Borras, a Fellow at the Transnational Institute, in many such contracts “certain clauses are highly restrictive, meaning that states are locked in to particular agreements over long periods. New laws to protect the environment or labour rights, for instance, cannot be implemented, as they may be subject to disputes and prohibitive compensation payments.”23

In general, African governments have been highly solicitous of multinational agribusiness. According to GRAIN, many countries have created a database of suitable land for investors, simplified procedures for investors to acquire lands, facilitated the resettlement of populations, and even established a “one-window service” for investors to cut through the red tape involved in acquiring land.24

While the land deals in Africa are being fast-tracked, there are few legal mechanisms in place to protect marginalized rural farmers and pastoralist herders from exploitation by powerful commercial entities and national governments. Nevertheless, there have been several attempts by international bodies to draft guidelines for such land purchases. The New Alliance for Food Security and Nutrition, a partnership formed last year between the G-8, a number of African governments, and multinational agricultural companies like Cargill and Monsanto, has proposed a set of voluntary regulations to govern the land sales. More recently, the FAO launched a consultation process that aims to formulate “Voluntary Guidelines for the Responsible Governance of Tenure of Land, Forest, and Fisheries in the Context of Food Security.”25

The World Bank put forth its own proposal in 2009, “The Principles for Responsible Agricultural Investment” (PRAI), which has been endorsed by both the G-8 and the G-20. The FAO-hosted Committee on World Food Security, however, refused to sign off on PRAI, calling for legally binding regulations rather than the loose and voluntary recommendations favored by agribusiness and many governments. The confusing web of voluntary programs has been challenged by local civil society organizations in Africa, such as Land Net Malawi, which allege that the record of compliance for such voluntary programs has not been encouraging.26

They say that local residents are rarely consulted before the contracts are drawn up, and that the terms of the deals are not publicly disclosed, even to international agencies, which are deliberately excluded from the process.27

The World Bank has complained that, in its effort to investigate the impact of the land deals in Africa, “access to information emerged as much more of a problem than anticipated. Even for data that should not be subject to any restrictions of confidentiality . . . , limited data sharing and gaps and inconsistencies in record keeping implied an astonishing lack of awareness of what is happening on the ground.”28

In some cases, peasants are paid small sums for their property. In other countries—such as those where the state retains formal ownership of the land, as in much of Africa—the farm is simply confiscated. There have also been reports of widespread human rights violations in the Gambella region of Ethiopia, where approximately 70,000 indigenous people are being forcibly removed in the so-called “villagization” program.29 The confiscated land is being leased to companies like the Indian firm Karuturi Global, which exports palm oil, sugar, rice, and cut flowers. The Ethiopian government claims that the displaced never possessed formal titles to the land (for plots that they had lived on and used for generations), and has called the region “uninhabited” and “underutilized.”30 It has also pledged to provide facilities and job training for the displaced, and has made assurances that their movement is “voluntary.”31

In a January 2012 report, “‘Waiting Here for Death’: Forced Displacement and ‘Villagization’ in Ethiopia’s Gambella Region,” Human Rights Watch paints a disturbingly different picture. It claims that relocations by state security forces “have been marked by threats and assaults, and arbitrary arrest for those who resist the move.”32 People are being moved to areas that often lack viable farmland, sufficient drinking water, adequate health and educational facilities, and even roads. The report also alleges that the relocation program has already caused endemic hunger and numerous cases of starvation.

Major foreign donors to Ethiopia include the United Kingdom, the United States, the World Bank, and the European Union. Their aid is used to fund economic development projects, and also to pay government salaries throughout the country—including in regions where the new villages are being constructed, and where the main activity of local governments is moving people off their land. Human Rights Watch has called on Western states to monitor the situation in order to ensure that they are not inadvertently providing support for Ethiopia’s forced displacement program.

Over the past decade Ethiopia has approved over 800 foreign-financed agricultural projects.33 The country plans to “resettle” 1.5 million additional people (nearly 2 percent of its total population) by the end of 2013.34 Land that has not been sold outright to foreign companies is being leased to them for a yearly fee—one as low as $1 a hectare.35 Similar deals are now being struck throughout Africa. China, for instance, has signed a contract with the Democratic Republic of Congo to grow 2.8 million hectares of palm oil for biofuels.Similarly, the war-ravaged country of Liberia has reportedly sold off nearly a third of its sovereign territory in the last five years.36

The ProSavana project in the Nacala Corridor of northern Mozambique—arguably the most ambitious venture of all—proposes to lease 14 million hectares (an area the size of Switzerland and Austria combined) to produce crops for export to Japan.37 Millions have already been forcibly evicted by the Mozambique authorities.38 While promoters claim that the huge project will take place entirely on abandoned land, others argue that this area is used seasonally by cattle herders and for charcoal production and subsistence farming. It is also notable that, while the land will be used for massive food exports, nearly half of children under five in Mozambique suffer from chronic malnutrition.39

Ivory Coast, a small West African country, has also been pushed by the G-8’s New Alliance for Food Security and Nutrition to offer multinational agribusinesses greater access to its land. In exchange for hundreds of millions of dollars in Western financial assistance, Ivory Coast has agreed to ease its land laws and to take other steps to facilitate private investment in agriculture. To date, some of the largest rice traders in the world, including France’s Groupe Mimran and Louis Dreyfus Group, Algeria’s Cevital, Singapore’s Olam, and Switzerland’s Novel Group have purchased an estimated 1 million hectares in Ivory Coast to grow rice for export.40 GRAIN predicts that tens of thousands of small stakeholders will be displaced from their land in the coming years, and that the country’s thriving domestic market for locally grown rice may be destroyed.

Environmentalists point out that when agribusinesses move in, sustainable local farming practices are often replaced by vast monocultures that deplete local water supplies, foul the environment with agrochemicals, and exhaust soils with petroleum-based fertilizers that replace traditional organic methods for enriching the land. Export-oriented industrial agriculture is designed to produce the maximum amount of food quickly. Unlike indigenous farmers, international agribusiness companies lack knowledge of local conditions and have little stake in the long-term viability of the land. For instance, large-scale irrigation on newly acquired tracts may further imperil Africa’s water supply. A report issued jointly by the groups Polaris and the Oakland Institute entitled “Land Grab Leaves Africa Thirsty,” warns that “if all the 40 million hectares of land that were acquired on the continent in 2009 come under cultivation, a staggering volume of water would be required for irrigation . . . approximately twice the volume of water that was used for agriculture in all of Africa in 2005.”41 Large-scale irrigation of this sort could have a major effect on already stressed river basins, such as the Niger, Nile, and Omo, on which hundreds of millions of people depend. Furthermore, water shortages may exacerbate preexisting regional tensions, such as those between Sudan and Egypt, both of which are downstream from arable land fed by the Blue and White Niles.

Supporters of such foreign agricultural projects assert that, in addition to increasing crop yields and the productivity of previously marginal areas, they bring technical know-how, improved infrastructure, tax revenues, and jobs to countries that desperately need them. For instance, Suma Chakrabarti, President of the European Bank for Reconstruction and Development, and José Graziano da Silva, Director-General of the Food and Agriculture Organization, have argued that more foreign investment “can fertilize . . . land with money . . . to make life easier for the world’s hungry.”42 But this is contested by Olivier de Schutter, the UN Special Rapporteur on the Right to Food. De Schutter says that those arguing for the land acquisitions often use humanitarian arguments that cloak their real motivation, which is to secure reliable supplies of food and reduce their own dependence on volatile international commodity markets. “They present humanitarian arguments that this develops marginal land for the benefit of local communities,” he writes. “[This] shouldn’t surprise us. It has been a constant feature of colonial powers in the past, and how they presented their ‘civilizing’ mission in the territories they occupied and exploited.”43

De Schutter and others say that it is counterproductive to displace small farmers and make them plantation laborers on what was once their own land. Studies show that peasant farming, which currently produces at least half of the world’s food supply, can—when it is done right—be even more productive than industrial agriculture.44 NGOs such as GRAIN have argued that development aid should therefore be directed toward improving local seed stocks and promoting sustainable practices, and not toward subsidizing international agribusiness.45 Consequently, Oxfam has pushed for a moratorium on land sales until firm international standards are put in place that mandate that such deals are negotiated in a transparent manner and with the participation and consent of the affected landowners.46 Time, however, is running out to effectively regulate these lucrative deals. For the foreseeable future, there seems little hope that the frenetic purchase of land in Africa and across the global South is going to slow down.

No one disputes that, in the years ahead, agriculture must be developed to cope with growing populations as well as the effects of climate change. As food activists see it, however, the challenge will be in how to remake the food system in a way that supports local farming rather than eliminates it. Corporate investment in agriculture will certainly be an important component of this strategy, but such investment will only be useful if it helps provide food for the millions of new guests who will be arriving at the global dinner table in the coming decades.

EDITOR’S CORRECTION: In the print version of this essay, Olam International is listed, along other companies, as having “purchased an estimated 1 million hectares in Ivory Coast to grow rice for export.” All Olam International properties in Ivory Coast are rented, not owned. Ethics & International Affairs regrets this error.

Food and Agriculture Organization, The State of Food Insecurity in the World: Economic Growth Is Necessary But Not Sufficient to Accelerate Reduction of Hunger and Malnutrition (Rome: FAO, 2012), p. 8. ↩

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Comments (1)

“Millions” of people have been displaced by Mozambican authorities in the Nacala corridor? 14 million ha is the entire area of the region, which has about 5 million inhabitants. Exactly how many people were forcibly evicted and where to?

This article would do well with some fact checking and it could be worth thinking through the plausibility of some of the claims made.